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1 Amir El-Sibaie, 2019 Tax Brackets 1 (2018)

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FISCAL

FACT

No. 624

Nov. 2018


2019 Tax Brackets




Amir El-Sibaie

Economist





On a yearly basis the IRS adjusts more than 40 tax provisions for inflation. This is

done to prevent what is called bracket creep, when people are pushed into higher

income tax brackets or have reduced value from credits and deductions due to

inflation, instead of any increase in real income.



The IRS used to use the Consumer Price Index (CPI) to calculate the past year's

inflation.' However, with the Tax Cuts and Jobs Act of 2017, the IRS will now use

the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction

amounts, and credit values accordingly.2


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1   Internal Revenue Service, Revenue Procedure 2018-57:' https://www.irs.gov/pub/irs-drop/rp-18-57.pdf.
2   Robert Cage, John Greenlees, and Patrick Jackman, Introducing the Chained Consumer Price Index:' U.S. Bureau of Labor
    Statistics, May 2003, https://www.bls.gov/cpi/additional-resources/chained-cpi-introduction.pdf.

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